The Founder's outpost in Detroit is just one of dozens of craft beer businesses to open in the last several years in metro Detroit.

A new report by the Southfield office of CBRE Inc. says the craft beer industry's real estate footprint in metro Detroit has more than quadrupled in less than a decade.

That adds more fuel to the sentiment that the region's and state's craft beer industry is one of the more dominant in the nation. However, it comes as some wonder whether the craft beer binge of the last decade is in the hangover phase, as 15 Michigan breweries have closed in the last year.

Since 2010, the industry in metro Detroit has grown by more than 680,000 square feet to north of 873,000, according to the CBRE report, called Michigan Craft Beer Taking Flight.

Sure, that's smaller than some Amazon distribution facilities around here, but that space accommodates 93 businesses.

In just the last five years, there have been 58 new craft beer businesses totaling north of 540,000 square feet opening in the region, according to the report.

There has been more than 50,000 square feet of new craft beer space added each year since 2012, although year-to-date 2019 is less than that. It was 2015 that was by far the largest, when 227,000 new square feet across 24 new businesses opened.

"The craft brew industry has taken flight in Michigan and we are seeing significant growth all across the state," Scott Young, first vice president with CBRE's Retail Practice Group, said in a press release. "People want experiences and the craft brew scene is one of the best examples in retail today of creating a unique environment to draw in consumers."

DefinitionsBrewpub: A brewery that sells 25 percent or more of its beer on site.

Contract: A business that hires another brewery to produce its beer.

Microbrewery: Produces 15,000 or less barrels of beer per year, and 75 percent-plus of its beer served off-premises.

Regional brewery: Annual beer production between 15,000 and 6 million barrels.

Photo

Kirk Pinho/Crain's Detroit Business

This run-down former Detroit Police Department building has sold to a new owner for $350,000.

New owner for old DPD building in the North End

A long-vacant former Detroit Police Department building in the North End neighborhood may get a new lease on life.

The building at 210 E. Bethune St. sold for $350,000 to an entity registered to Edmond Demaj of Kode Labs, based on Clifford Street in Detroit.

It had been used as horse stables and a precinct office for the police department, according to a listing by Detroit-based brokerage Summit Commercial LLC, which handles real estate transactions for the city.

City spokesman Tim Carroll said the police department last used the property in 2005 but no other information was available. An image archived with the Detroit Public Library says it was built in 1898.

Messages left with Demaj through Kode Labs last week were not returned, although a Planning and Economic Development standing committee agenda says that EBE Bethune LLC plans to "renovate the structure into commercial office space."

I'll let you know more when I get the info.

An industrial slowdown ahead?

CBRE Inc. released a new report on industrial markets around the country and there are some interesting industrial stats to take into consideration as the year begins to wind to a close.

This year is nowhere on pace to match the pace of construction from 2018, when 6.4 million square feet of new space was built. So far, just 900,000 square feet has gone up, which compares with 700,000 in 2014; 2.4 million in 2015; 2.3 million in 2016; and 2.7 million in 2017.

Dan Labes, executive managing director in the Southfield office of brokerage firm Newmark Knight Frank, said that although new construction starts dipped in the fourth quarter last year and first quarter this year, there has been an increase the last two quarters.

"These new projects include build-to-suits for SAPA Transmission, Edward W. Duffy & Co., Hans Power and Water, Bluewater Technologies Group Inc. and a soon-to-be started 100,000-square-foot facility for Giffin Inc.," Labes said. "Meanwhile, new speculative developments have started ranging from 40,000 square feet to 260,000 square feet in Macomb Township, Lake Orion and Orion Township."

In addition, the YTD vacancy rate is the first uptick registered since 2013, when it was 8 percent. It has fallen every year since, from 6 percent in 2014 to 4 percent in 2015. Then it fell to 2.7 to 2.1 to 1.9 percent 2016-18.

Year to date, it's 2.4 percent.

"There are signs the market for existing space has slowed somewhat with a handful of new availabilities in traditionally stronger markets like Auburn Hills," Labes said. "Another consideration is commercial real estate activity seems to slow during the summer and peak toward the end of the year. Though the trade dispute and tariffs are hampering activity in the Metro area."

Let's see how the rest of the year plays out.

Photo

CoStar Group Inc.

A $22.5 million renovation of the Park Avenue Building at 2001 Park Ave. on Grand Circus Park is expected to take two years to complete, bringing 78 apartments and 5,500 square feet of commercial space online.

Park Avenue building redevelopment seeks brownfield incentives

Rino Soave's planned redevelopment of the building at 2001 Park Ave. on Grand Circus Park is seeking about $988,000 in brownfield tax incentives for the $22.5 million project.

That's according to a brownfield plan posted on the Detroit Brownfield Redevelopment Authority's website. The plan says the project is expected to result in a 78-unit apartment building with 5,500 square feet of first-floor commercial space.

The plan says some work is expected to begin next month and the project should take two years to complete.

Detroit-based Kraemer Design Group is the project architect while CIR Group, based in Commerce Township, is the general contractor.

Soave, founder of Novi-based homebuilder Infinity Homes & Co., paid $4.9 million for the 102,000-square-foot building in April 2018, according to city land records.

The Park Avenue Building was built in 1922 and had in recent years faced demolition, according to a 2014 Curbed Detroit report.

From around the web

• The New York Times explores Opportunity Zones, one of the newest federal tax incentives for real estate developers. The alleged goal of the program, which was passed under the federal tax overhaul from 2017, is to funnel investment into areas traditionally in need of it, but so far it has not broadly done so and in fact largely benefited projects geared toward the wealthy. Well worth the read.

• Coresight Research says the U.S. could have 12,000 store closings by the end of this year and that there have been 7,888 announced so far in 2019. That already dwarfs the 5,844 store closures in 2018.